Greece enters uncharted territory after referendum 'no' vote

Greece lurched into uncharted territory and an uncertain future in Europe's common currency Sunday after voters overwhelmingly rejected demands by international creditors for more austerity measures in exchange for a bailout of its bankrupt economy.

Results showed 61 percent voted "no," compared with 38 percent for "yes," with 97 percent of the vote counted. The referendum — Greece's first in more than four decades — came amid severe restrictions on financial transactions in the country, imposed last week to stem a bank run that accelerated after the vote was called.

Thousands of jubilant government supporters celebrated in Syntagma Square in front of Parliament, waving Greek flags and chanting "No, no, no!" Early trading on Asian markets indicated investors were alarmed, as stock indexes fell.

It was a decisive victory for Prime Minister Alexis Tsipras, who had gambled the future of his 5-month-old coalition government — and his country — in an all-or-nothing game of brinkmanship with Greece's creditors from other European countries that use the euro currency, the International Monetary Fund and the European Central Bank.

"Today we celebrate the victory of democracy," Tsipras said in a televised address to the nation, describing Sunday as "a bright day in the history of Europe." "We proved even in the most difficult circumstances that democracy won't be blackmailed," he said.

Tsipras called the referendum last weekend, saying a "no" vote would strengthen his hand to negotiate a better deal for his country. His government has said it believes it would be possible to conclude a deal with creditors within 48 hours.

But European officials and most of Greece's opposition parties painted the referendum as one of whether the country kept using the euro currency — even though that was not the convoluted question asked on the ballot. Opinion polls Friday showed that 74 percent or more want their country to remain in the euro.

"Given the unfavorable conditions last week, you have made a very brave choice," Tsipras told Greeks in his address. "But I am aware that the mandate you gave me is not a mandate for rupture." He said he would seek to negotiate a viable solution with the country's creditors.

How European officials react to the referendum result will be critical for the country, and a eurozone summit was called for Tuesday evening to discuss the situation. German Chancellor Angela Merkel and French President Francois Hollande spoke to each other Sunday night and agreed "that the vote of the Greek people must be respected," Merkel's office said.

The referendum result was "very regrettable for the future of Greece," said Jeroen Dijsselbloem, head of the eurozone finance ministers' meeting known as the Eurogroup, which also will meet Tuesday. Dijsselbloem, who is finance minister for the Netherlands, had been a steadfast opponent of Greece as it sought better conditions during five months of bailout talks.

"For recovery of the Greek economy, difficult measures and reforms are inevitable," he said. "We will now wait for the initiatives of the Greek authorities." Sigmar Gabriel, Germany's vice chancellor and economic minister, told a German newspaper the Greek government was leading its people "onto a path of bitter austerity and hopelessness."

Tsipras has "torn down the last bridges, across which Europe and Greece could move toward a compromise," Gabriel told the daily Tagesspiegel. "By saying 'no' to the eurozone's rules, as is reflected in the majority 'no' vote, it's difficult to imagine negotiations over an aid package for billions."

Belgian Finance Minister Johan Van Overtveldt was somewhat softer in his reaction, saying a "no" result "complicates matters," but that the door was open to resume talks immediately. "What we certainly don't want to do is to take decisions that will threaten the monetary union," he told Belgium's VRT. "Within that framework we can start talks again with the Greek government, literally, within hours."

Time has run out for Greece, which is dealing with an economy in a protracted recession, with high unemployment and banks dangerously low on capital. The international bailout — under which it received nearly 240 billion euros in rescue loans — expired last week, on the same day Greece defaulted on an IMF repayment, becoming the first developed nation to do so.

Greece now has "junk bond" status. You know you have been had when the choice is writing off the debt or loaning more money.

The US is on this road now.

scary times ahead..

They better roll out the printing presses.

Prime time for the Digital Drachma.

(Pretty Hard To Avoid Taxing That)

Why Greece Matters To Everyone & Domino Affect

http://time.com/3946341/greece-global-economic-impact/

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Prime Minister Stepped Down, Says Greece Is ' Brave '


http://www.foxnews.com/world/2015/07/06/greek-finance-minister-yanis-varoufakis-announces-resignation-after-no-vote/?cmpid=NL_morninghl/

Thank God the Torries got voted in here. At least they have a strategy to avoid this.

If it were Labour we would be on the road to ruin because all they seem to do is look after those who don't work. Great until you run out of tax payers money.

As for Greece, as much as I feel for the people I don't see why they should be treated any differently than other Countries who have been through this.

Now their finance minister has just resigned. Talk about picking your moment or jumping ship.

Because Joe, the "Euro" project was flawed from the very beginning, out of the 19 country block, only 2 countries are prospering, Germany and France.

1st, Germany being the industrial powerhouse that it is, what quantity of German goods would be exported to Euro members if the Deutsch mark value was 3 times other members currency? It is to their advantage to keep the "Euro" currency alive by any means.

2nd, France has not adopted fiscal reforms on pensions set forth by the EU themselves, how can they preach anything to others?

and 3rd... Yes Greece owes $350 Billion EU, that's $250 Billion more than in 2012 when they should have pulled out. Consider this, Italy owes $2.6 Trillion(dwarfing the Greek debt), that debt too is unsustainable and in my opinion, the next to fall.

Germany is doing with the pen what they could not do with the gun, everybody thinks Germany is bailing out the Greeks when in fact, 90% of the German funds were to bail out their own financials exposed to Greeces downturn.

Finally, Greeks can survive on figs & olives, they've created the civilised society... The world should heed this warning, they can also take it down!

How ridiculous of the troika to blackmail an ancient civilization.

This whole sordid affair reminds me of our education system.

You have a group of central planners that are oblivious to local needs and their decisions are based on what they deem the collective good.

The problem is that within this collective there are individuals that cannot compete with the others and they are measured by unrealistic standards.

Then everyone shakes their head wondering why they have failed and the bailout plan is just to throw more money at it.

Centralized failure..

Greece is nothing more than a entitled welfare country. These people haven't seen real austerity yet.
We are going in the same direction too.

BTW,we bailed out Armenia's social security system a while back.
Keeping them afloat.

Yes, everything I've heard from greek citizens and everything I've read suggests this is true - even from people who defend Greece in this standoff.

Rather than writing off the debt, I suspect the Germans will offer them a better deal than the one voted down.

If the debt is NOT sustainable, it's just not sustainable. Period!

They'll be right back to where they are now.

The brow beaters better smarten up, Greece IS NOT a industrial complex, it's a tourist destination. 50% youth unemployment, aging population is only making things worse.

Again, a little perspective for ya'll. Back in 2012, pensions were slashed from approx $800Eu to $400Eu monthly. 4800$ a year. But consider this.

Historically, Greeks were always inclined to put their money in Brick & mortar investments, basically buying property for rentals(to retire on). Now imagine the renters not paying up because of hardship combined with their unemployed kids and their families (grandchildren) moving back home to live with their elderly parents, property values cut in half, no way to sell them, major property tax increases yearly. It's a 6-7 year death spiral that someone orchestrated.
Talk of cutting pensions again would suffocate entire families and not just the pensioners.

Greece hasn't recuperated at all from the Lehman Brothers fiasco downdraft back in 08. USA printed Trillions of more US$ and kicked the can down the road for a while.

Don't kid yourselves, the world is in a terrible place financially.

John111 quoted,

If the debt is NOT sustainable, it's just not sustainable. Period!

They'll be right back to where they are now.

Don't kid yourselves, the world is in a terrible place financially

Greece submits a new bailout letter on July 8, 2015...

http://online.wsj.com/public/resources/documents/eugreecepdf.pdf

http://www.slate.com/articles/news_and_politics/foreigners/2015/07/greece_has_pushed_the_european_union_to_the_edge_the_eu_must_deepen_its.html/

GREECE HAS PUSHED THE EUROPEAN UNION TO THE BRINK
FOREIGNERS
OPINIONS ABOUT EVENTS BEYOND OUR BORDERS.

JULY 9 2015 5:00 AM

Europe’s Turning Point
After the Greek crisis, the European Union will either have to deepen its union or drift apart.

By Anne Applebaum

On July 20, the government of Greece is supposed to pay 3.5 billion euros to the European Central Bank. Writing now, more than a week before that debt is due, I am loath to predict what will happen. Clearly, the government of Greece doesn’t have 3.5 billion euros. An emergency meeting of European leaders on Sunday might come up with a solution, but it might not. The consequences of a failure could include the collapse of the Greek banking system and a disorderly Greek exit from the euro currency, with knock-on effects on dozens of institutions that are exposed to Greek debt.

But while I’m not going to predict what will happen in the coming days, I am going to place a much longer-term wager: The Greek crisis represents a turning point in the history of the European Union and in particular the eurozone, the European states that use a common currency. They will now either have to deepen their union—or refuse to do so and watch it drift apart.


Until now, no one has wanted to make this choice. Since the creation of the euro in 1999, the members of the currency union have lived in a state of what Marxists used to call false consciousness. They have shared a currency and a central bank. But they’ve had different tax policies, they’ve run different budgets, and they’ve followed radically different economic paths. The result is that the euro has been a brilliant success for Germany and a disaster for Greece—as well as, arguably, several other countries.

All of this was foreseen. In Brussels in the 1990s, one certainly met people who anticipated crises like the one that began six years ago in Greece—and who favored the common currency precisely in order to create them. The idea was that the single currency would quietly and technocratically force “good behavior” and responsible public spending on all of the governments of Europe, so that all of Europe’s economies would become stronger. Then, over time, it would become possible to coordinate tax policy, fiscal policy, and so on.

There was even a moment in 2010 when it looked like this might happen. That was when the European Union and the International Monetary Fund agreed to bail out Greece in exchange for an extraordinary and unprecedented list of specific policy changes. Among many other things, Greece agreed to reduce “Easter, summer, and Christmas bonuses” of civil servants and pensioners, to raise the retirement age from 61 to 65, to use generic drugs in its health care system, to simplify the regulations on business startups. At the time, I wondered whether Greeks would tolerate such a huge range of reforms if they were perceived as “foreign,” imposed from abroad. Now we know the answer: They didn’t.

The era of false consciousness is over, as is the pretense that Europe could have a successful common currency without other common economic policies. If it wants to survive, the eurozone now has to become Euroland: something much more like a federal state, or a quasi-state, or anyway an entity that shares more than the same bills and coins. This federal union, whatever structure it is to take, will have to write the rules for member states but not in an atmosphere of emergency, as happened in Athens in 2010. This union will have to be created openly, according to agreements that are well understood and agreed upon by elected governments and parliaments in advance. The rough parallel in U.S. history is the move from the Articles of Confederation to the Constitution. Those who object will have to leave, perhaps to join Britain, Denmark, and others that won’t want to be part of a European federation, though they may want to remain part of a broader “second tier” of the European Union.

Just because this is what should logically happen doesn’t, of course, mean that it will—or that it will work. Indeed, the odds are against it. The euro may well stumble on, inspiring economic upheaval as well as more anti-European populism. Alternatively, the eurozone may lose a few more members—or, eventually, cease to exist at all. If nothing else, the Greek crisis—however it resolves itself—has made these choices clear.

Anne Applebaum is a Pulitzer Prize-winning author. Her most recent book is Iron Curtain: the Crushing of Eastern Europe, 1944-1956.

http://www.cbsnews.com/news/euro-currency-emerges-intact-for-now/

Approximately 4 hours ago

Jul 13, 2015 11:12 AM EDT
THE HAGUE, Netherlands - Europe's monetary union appears saved. For now.

Although relief prevailed after Monday's Greek bailout announcement, key questions remain about whether the euro currency will remain sustainable in the long-term -- and even whether the European Union itself remains a viable project.

New Greece bailout deal with EU requires more cutbacks
The weekend's marathon negotiations over Greece's third multi-billion euro bailout in five years put Prime Minister Alexis Tsipras on notice that if he does not push through deeply unpopular economic reforms, his country could still be cut off from aid and face the risk of a painful exit from the euro. It was not clear whether Greeks would play along with the painful measures, and tussles between Germany and France over the terms of the bailout also showed key divisions between the engines of European unity.

The upshot of the saga: Europe is still heading into a prolonged period of uncertainty.

Some, however, saw the tough terms of the bailout agreement breathing new life into the euro itself, shared by 19 countries in the 28-strong European Union. Zsolt Darvas of the Bruegel think tank in Brussels said a more stable and stronger currency could emerge from the drama of the past week.

Caving to Greek demands for leniency, he argued, would have been the worst outcome for the future of a united Europe: "An alternative decision ... giving major concessions to Greece after very inefficient and unproductive negotiations, would have likely fueled populist movements in other euro area countries, which would have increased political instability and thereby economic and financial instability."

The crisis may also serve as a wake-up call about far greater trouble that will lie ahead if bigger EU economies, like Spain or Italy, flout budgetary rules and find themselves in a new financial morass. Greece accounts for just 2 percent of the total wealth of the Eurozone.

"Greece was maybe a piece of cake compared to what bigger countries might provoke in terms of problems," said Adriaan Schout, senior research fellow and coordinator of the Europe program at Hague-based think tank Clingendael.

Now that the immediate Greek bankruptcy crisis is seen to be receding, a crisis of confidence over the European project may be taking its place.

The nucleus of the current-day European Union was forged in the ashes of World War II -- a plan hatched in 1951 to pool six countries' coal and steel industries. The goal back then wasn't so much economic prosperity and unity, as it was stopping long-simmering enmities between neighbors on the continent again boiling over into global conflict.

On that foundation, leaders have built a pan-European edifice that now numbers 28 countries with more than 500 million inhabitants. As the bloc grew over the years, so did its ambition, leading in 1999 to the euro single currency intended to turn the union into a global market force.

Yet today, Greece has exposed these goals of ever-closer union to be a possible chimera.

The current Greek drama "shows us the dilemma we have always had with Europe: Our ambitions are running ahead of our ideas of how to run actually an economic and monetary union," said Schout. "Even a small country can make a lot of waves."

Strength in numbers was one of the underpinning ideas behind economic and political union in Europe. But the flip side is that economic disparities across the continent also breed divisions and distrust. Why, many in wealthy nations like the Netherlands ask, should I stump up more cash to help a country like Greece that sometimes does not appear to want my help?

Then there are also lingering questions about the merits of imposing austerity on debt-stricken nations. Even in bailed-out countries touted as success stories, clambering out of the economic abyss has taken its toll, with unemployment sky-high and living standards falling.

In Portugal, which got a 78 billion euro bailout in 2011, the economy grew 0.9 percent last year after three straight years of recession. But government debt is still 130 percent of gross domestic product and the three main ratings agencies keep junk ratings on Portuguese bonds. Living standards and public services are significantly lower than before the bailout, and some 400,000 people have left the country to find work since 2011.

But throughout the financial crises that have roiled southern Europe, the euro has endured. The Greek compromise means that the currency has at least survived intact to fight another day.

In Britain -- a European Union member that decided against joining the euro -- treasury chief George Osborne responded to the deal brokered on Greece with "a cautious welcome that the Eurozone has stepped back from the brink."

Problem grows:

JaiGi ,
It is tragic, in all aspects.
I read stats on immigration & migrations as well as the tears.
This is happening through out half the world. These countries can NOT handle it, & the problem is esulating.

Sadly, with all the powers that be & people as individuals & groups have unwillingness to change, & do something for their own country.

This is only the beginning.
It will get, much, much worst to the point of militarization & death .